In response to declining funding support and increasing competition, medical schools have developed financial management models to assure that resource allocation supports core mission-related activities. The authors describe the development and implementation of such a model at the University of Wisconsin Medical School. The development occurred in three phases and included consensus building on the need for mission-based budgeting, extensive faculty involvement to create a credible model, and decisions about basic principles for the model. While each school may encounter different constraints and opportunities, the authors outline a series of generic issues that any medical school is likely to face when implementing a mission-based budgeting model. These issues include decisions about the amounts and sources of funds to be used in the budgeting process, whether funds should be allocated at the department or individual faculty level, the specific metrics for measuring academic activities, the relative amounts for research and teaching activities, and how to use the budget process to support new initiatives and strategic priorities. The University of Wisconsin Medical School's Mission Aligned Management and Allocation (MAMA) model was implemented in 1999. The authors discuss implementation issues, including timetable, formulas used to cap budget changes among departments during phase-in, outcome measures used to monitor the effect of the new budget model, and a process for school-wide budget oversight. Finally, they discuss outcomes tracked during two years of full implementation to assess the success of the new MAMA budget process.
In the early 1990s, medical schools began examining their budgeting processes to align their resource allocations with the fulfillment of their multiple missions. The Association of American Medical Colleges (AAMC) encouraged and supported schools' widespread interest in mission-based management (MBM) by creating forums for institutional leaders to share their variety of approaches, and several years later developed an operational framework. 1-3 Early efforts at conceptualizing and developing models of ways to link academic resources with faculty effort have been described to help other institutions develop their own resource-allocation plans. 4-10 The University Hospital Consortium initiated a related effort for identifying revenue streams (funds flow) among schools and their related hospitals and practice organizations. 11
Currently, approximately 25% of U.S. medical schools are working on the development of metrics to measure the teaching and academic activities of faculty. 12 However, relatively few have implemented systems that link the budgeting process with those metrics. At the University of Wisconsin Medical School, a method for alignment of resource allocation and academic mission has been developed and is in its second year of implementation. In this article, we report on the process of development, the model's successes thus far, and the lessons we learned in development and implementation.